To continue building its growing beauty subscription business and proprietary tech that matches subscribers to must-have makeup items, Beauty For All Industries (BFA)–parent company of Ipsy and BoxyCharm–announced a $96 million investment led by TPG Growth.
“[Our subscribers] are trusting our curatorial capabilities,” says Marcelo Camberos, CEO and cofounder of both Ipsy and BFA. “Tech and personalization is our biggest growth lever, especially with our 200 million-plus product reviews. That’s more beauty reviews than on Amazon or any other platform.”
In addition to product reviews, BFA’s machine-learning platform pulls data from millions of subscriber quizzes and feedback to create personalized algorithms and thus personalized beauty boxes. The formula also guides product launches for in-house and partner brands, ranging from hit Japanese skin-care line Tatcha to salon-favorite hair-care brand Oribe.
TPG previously backed Ipsy in 2015. Since its launch in 2011, the beauty platform has raised more than $230 million in funding. “We have been impressed by their ability to consistently and successfully deliver personalized beauty . . . ” said Peter McGoohan, partner at TPG, in a statement. “They have a pulse on what the customer wants and the agility to pivot and adjust as consumer behaviors and preferences change.” BFA and TPG Capital declined to comment on valuation.
“The Zoom revolution’s impact on beauty cannot be underestimated—2020 was a boom for us,” says BFA’s CEO Marcelo Camberos.
When Ipsy launched in 2011—a year after Birchbox and FabFitFun began shipping subscription kits filled with beauty products and other self-care goodies—it already seemed late to a crowded party. But Ipsy had a unique advantage in its beauty bag: Michelle Phan was a cofounder. An early beauty influencer, the pioneering YouTube star and Forbes Under 30 lister helped Ipsy’s subscriber count catch up with the competition, alongside her cofounders, Camberos (cofounder of online comedy site Funny or Die), and Jennifer Goldfarb (who came from Bare Escentuals).
When Phan left the startup in 2017, selling her stake for a reported $35 million, Ipsy continued on full steam, and by 2018, it managed to become the largest beauty kit startup with 3.5 million subscribers, a million more than BirchBox. Ipsy soon announced a new Glam Bag Plus service that delivered full-size items instead of mini samples.
To double down on delivering full-size tubes, bottles and palettes, it purchased BoxyCharm in 2020. With the acquisition of the Miami-based beauty subscription, Camberos and Goldfarb formed Beauty For All Industries (BFA). Together, both startups reach more than 30 million subscribers and, despite the pandemic, pulled in $1 billion in annual revenue in 2020.
“The Zoom revolution’s impact on beauty cannot be underestimated—2020 was a boom for us,” says Camberos.
He aims to sustain the growth experienced during the pandemic by hiring more engineers and refining its tech and logistics. “Beauty personalization at scale is very complicated to pull off,” says Camberos. “To perfect our machine learning algorithm, then to operationalize it in our fulfillment centers all to ensure our members are receiving the right personalized items within five business days, requires nonstop attention.”
From Phan’s YouTube days to keeping up with Instagram and TikTok, the DTC data is also vital because the social media landscape is always in flux. “It’s like whack-a-mole, having to chase the next platform right now and how to engage and find that potential customer,” he says.
Although Phan is no longer involved with the company, Ipsy has still managed to root itself deeper in the creator economy. With the formation of BFA came the Madeby Collective, which incubates both indie labels (it has invested more than $20 million in Black-owned beauty businesses to date) as well as influencer-driven brands. Its first in-house DTC line was ITEM Beauty, cofounded by Addison Rae, another Forbes Under 30 lister and one of the biggest TikTokers in the world with more than 86 million followers.
“We’re very much part of the creator revolution.” says Camberos. “We were the first company to start with a creator-influencer cofounder and now we’re working with one of the biggest on TikTok.”
With the new funding, BFA is now leaning on global influencers to expand overseas. Earlier this month, Ipsy debuted in Mexico by teaming up with Mexican-American singer Becky G (Rebecca Gomez) and her beauty line, Treslúce Beauty, which she cocreated with BFA.
“My face and social following are just part of the full picture,” says 24-year-old Becky G, who has more than 30 million Instagram followers. “BFA complements my personal brand with incredible technology, data and reach at a speed and scale that would take me years to achieve if I tried to start from scratch.”
Despite their enormous followings, the stars still lean on BFA’s subscription strategy to stand out in the saturated celebrity beauty market. BFA builds a dedicated brand team to help its in-house creators develop a brand and marketing strategy, and guide their product development and distribution.
Influencers and creators also tap BFA’s resources for the less-glam aspects of building a beauty business: engineering, finance, legal and more. The company also guides them on how to establish a brick-and-mortar presence, as it did with Addison Rae’s Sephora launch last year.
The influencers, meanwhile, are of course thrilled to be one of five items in any Ipsy Glam bag or BoxyCharm box. “Their subscription model has been an amazing way to introduce Tresluce to millions of other beauty-obsessed people and build immediate brand awareness,” says Becky G. “It would have been impossible to achieve that immediate reach on my own.”